interpret this

The big one

The recession which started in 2007 is still grinding on in 2013. Calculated Risk recently updated his US payroll projection graph and I have included it below:

Months till return to peak employment for post war recessions

Click here for full sized version.

One of the striking things about this chart is the different shapes of the three last recessions. These three recessions (1990, 2001, 2007) have been vociferously fought with a zero rate interest policy. And you can see that it does actually work for 1990. The recession is a bit longer but it is much shallower. Then in 2001 it again makes the recession shallower. But at the cost of making it twice as long as any preceding post war recession. Can it really be said to have worked? Now 2007. The monetary policies set in place for the 2001 recession never actually went away. It is clear that this recession is so much deeper and and longer lasting than anything but the Great Depression.

Hansel - 19/05/2013